Good Financial Reads: Understanding Tax Reform

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With the recent, yet surprising, cooperation between the White House and Congress, the Trump tax reform bill is set to take effect starting this new year. Don't worry your 2017 tax returns are not impacted. However, the tax law changes will affect personal incomes for the next 10 years, starting in 2018. So the question many of my clients have been asking me is, how does tax reform impact our personal bottom line? I wish there was a simple answer to the previous question.

The House of Representative unveiled its tax reform legislation, the Tax Cuts and Jobs Act (TCJA), last week, setting off a barrage of articles, analysis and social media posts.

The bill would affect many elements of tax planning and filing, but today I want to focus specifically on its impact on itemized deductions. Itemizing is a pretty big issue for a lot of you. So I want to use this opportunity to help you understand a bit more about your return and how things may change for you if some of these provisions become law.

The suspense is over – The most talked about Tax reform is finally signed into law by President Trump a few hours ago. Yes, that is right – the new Tax legislation is in for the year 2018 and beyond!

Well, what does it mean to you personally? Did you lose some of your current tax breaks? Or you got some new opportunities? Or is it blurry that you still do not know what to expect?

Many questions for which you must be looking for answers. Don’t worry – You are not alone. I am sure millions of professionals like you are thinking the same. While my best recommendation for you is to seek professional advice, here is a start. Let’s discuss...

Recently, many people asked me about the tax reform. I always replied that let's wait and talk about it when it's finalized. On December 22, 2017, president Trump signed the tax bill into law. Now it's time to take a look at it. Instead of focusing on the differences between current and new tax bill which you cannot control anyway, I will go through some potential tax planning strategies that may apply to you due to the changes. This post is intended for people who either prepare tax returns by themselves or at least have a basic understanding of how the U.S. tax system works. If you have any questions or not sure about any terms or strategies mentioned here, I recommend you consult a tax professional for your specific situation.

Congress is hard at work right now revising the tax code, a process that has added a great deal of uncertainty to year-end tax planning. I’ve heard from a number of people who are worried about losing deductions next year, and even some who are considering prepaying currently deductible expenses like property and state income taxes. However I would like tocaution you against taking drastic steps. We don’t have, and may never have, a final bill. As such, we don’t know what specific provisions will remain or how the lack of provisions will affect your overall situation.

Your taxes, as well as the rest of your financial life, are like a set of dominoes. Changing one piece almost inevitably affects others. This is especially true when it comes to the Alternative Minimum Tax (AMT), which the House has removed from its plan but the Senate has retained (although with a higher exemption amount).